The Union Cabinet is likely to approve a proposal to extend the free food grain scheme for the poor by three more months, according to sources. This will cost more than $18 billion annually to the exchequer.
The government provides free 5 kg food grain to poor families under the Pradhan Mantri Gareeb Kalyan Anna Yojna (PMGKYA).
A hike of 4 percent in Dearness Allowance(DA) for 50 lakh employees and about 62 lakh pensioners of the central government is also expected soon, the sources said.
PMGKAY has been extended five times since 2020. The ongoing sixth phase is due to end on September 30. If the government ratifies the proposal, then it will be the seventh extension for the scheme. The seventh phase will require about 120 LMT of food grain, involving about Rs 45,000 crore of additional expenditure, the sources said.
The push from the food ministry to extend the dole comes despite reservations from the finance ministry. The finance ministry has suggested reducing the amount of grains offered due to fiscal pressures and tight supplies globally.
The free food grain scheme increases the need for an abundant supply of cheap grains. This year, India has had to restrict exports of wheat and rice after erratic weather hurt harvest, adding to pressure on food prices, and rattling global agricultural markets.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
